Closing Wrap-Up, January 23
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January 23, 2009
Support holds with stocks closing mixed Friday on mixed earnings news. The Dow ($INDU) fell 45.24 points to close the session at 8,077.56. The S&P 500 ($SPX) gained 4.45 points to finish the session at 831.95. The Nasdaq ($COMPQ) tacked on 11.80 points to 1,477.29. Volume was moderate on the session with 1.42 billion shares traded on the NYSE and 2.18 billion shares exchanging hands on the Naz. Market breadth was mixed with the Big Board seeing advancers outpace declining stocks by a 16-to-12 margin, but Nasdaq stocks seeing 13 winners for every 14 losers.
General Electric (GE) pulled down the Dow Friday with the blue chip conglomerate falling 11 percent to $12.03. GE reported that earnings in the fourth-quarter fell 44 percent and though the company maintained its dividend, it warned that 2009 would be a tough year. The stock was able to bounce off its intraday low, which was at the 52-week nadir. GE is a Dow component and was the major reason why the blue chip index saw losses. Even so, technicians were pleased to see the 8,000 level hold heading into the weekend.
Stocks seem to be in a holding pattern as traders await details about the new administration’s plans to fix the ailing economy. This week was a volatile one for financials, but the net result was mostly flat. The Financial Select SPDR (XLF) closed Friday at $8.99, down from $9.68 last Friday. Of course, billions of dollars is expected to be spent to jump start the economy, but traders are upset that TARP monies have not done what they hoped it would. Yes, it did save many institutions, but now there are worries without substantially more bailout money, these companies will go under anyway.
Tech stocks have shown some strength of late led by strong earnings for IBM (IBM) earlier in the week and Google’s (GOOG) earnings last night. GOOG reported that earnings in the fourth quarter came in at $5.10 a share, 15-cents above consensus estimates. Revenues were up 24.6 percent, also besting expectations. GOOG shares rose 5.94 percent on the session to close at $324.70.
Economic news was light Friday, but will pick up next week with several key reports on tap. Data on existing home sales, durable goods orders and GDP are all on tap, along with the FOMC meeting on Tuesday. The committee really can’t cut rates any further, but there outlook could move markets.
Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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